City gets tough on tax dodgers

Published on Saturday 2 February 2008 10:03

A MAJOR crackdown has been launched on nearly 2700 residents who are refusing to pay their council tax and costing the city £9.25 million in lost revenue.

An investigation by council chiefs has identified a large number of people who owe them money, and they will now be threatened with the seizure of their assets.

The 2673 individuals have been classified "can pay, won't pay" following analysis by the Experian credit reference agency, based on the financial transactions at their home address.

The council now plans to aim its resources directly at these individuals, rather than those in genuine financial difficulty. If the tactic works, the crackdown could also be applied to other debts owed to the council, such as statutory notices.

Councillor Gordon Mackenzie, the city's finance leader, said: "The council is owed millions of pounds from people who have the capacity to pay their council tax but choose not to.

"It costs money and time to recover this debt and our focus is on targeting those who can afford to pay off their debt rather than those in financial difficulty.

"By reviewing our policy on debt recovery we have the potential to recover large sums of money which can be ploughed back into council services."

In recent months, the local authority has dramatically improved the rate of council tax collection. The turn-around comes after the council collected just 92.6 per cent of council tax in 2006 – the second worst rate in Scotland.

By focusing on collecting money through direct debits, alongside moves to deliver reminders and summary warrants much more quickly, staff now have more time to direct resources at difficult-to-collect debt.

Director of finance Donald McGougan said: "In conjunction with Experian, a high level analysis of all council tax debt linked to most-likely-to-pay post codes has been carried out, and this indicates that there is approximately 9.25m worth of debt associated with what could be described as the 'can pay, won't pay' category."

The council plans to order these people to pay their debt immediately if they owe less than 500, or to settle within one year if they owe more.

"Where a customer in the identified category is not prepared to agree, a letter will be issued threatening sequestration," said Mr McGougan.

Labour group leader Ewan Aitken agreed that people in the "can pay, wont' pay" category "need to be pursued".

"The rest of us end up subsidising those who don't pay council tax," he said.

The city's financial pressures are set to ease this year, after a separate review of people wrongly claiming single-occupancy discounts helped bring in more council tax.

The authority launched the crackdown last year, amid fears that thousands of households were fraudulently claiming the discount. However, at least two elderly residents were mistakenly ordered to prove their dead partners were no longer living at home.

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